Investigators Say They've Seen It All : Welfare: The pilot project has uncovered everything from a Porsche-driving art dealer to 'absent' fathers hiding in closets--and too many neglected children.

ANAHEIM — In the year that special investigators Freddie Moreno and Ana Vega have worked on a pilot welfare fraud project, the two have seen everything from minor infractions to truly spectacular examples of dishonesty.

One case in particular stands out: It is that of a Newport Beach woman who allegedly had hidden her income as an art dealer and her ownership of an early model Porsche.

The woman admitted she had been paid in cash for selling artworks, Vega said, but her mother had a lien on the Porsche, throwing into question its ownership. Welfare recipients are not allowed to own a car valued at more than $1,500.

"Just when I think I'll never be surprised again, somebody finds a way to cheat that just amazes me," Moreno said, listening to Vega's tale.

Their surprise visits to recipients' homes have turned up fathers--who were reported by the mothers to be absent deadbeats--hiding in the closet. And the two have unraveled employment and Social Security paper trails to find hundreds of dollars in income more than recipients have declared on their welfare applications.

On their visits to recipients' homes, Moreno and Vega are courteous but firm. They always ask permission to enter and search a home, they chat pleasantly with children if they are present and sit down when invited to do so.

But they also admonish recipients to be scrupulously honest during the interview and remind them that the penalty for fraud is time behind bars.

Welfare recipients who commit more than $1,000 of fraud are prosecuted. Most are fined and put on probation, but they can be sentenced to one to 14 years in prison.

The Newport Beach woman working as an art dealer was one of Vega's cases.

"It was clear just from looking at her expenses that the welfare benefit couldn't possibly cover them," Vega said.

After Vega confronted her, the woman admitted to working and receiving about $300 a month more than she reported to the county Social Services Agency. But Vega suspected she earned much more. After Vega left her apartment, the woman did what many recipients who learn they are part of the pilot study do: She called the Social Services Agency to cancel her welfare, Vega said.

No charges have been filed against the woman pending the completion of an investigation.

Moreno and Vega visited another recipient's apartment, at 5th Street in Santa Ana, one day this month.

The woman was not home, so Moreno knocked on neighbors' doors, finally showing the welfare recipient's picture to a woman to make sure they were talking about the same person.

The neighbor said the recipient had returned to work.

The recipient's sister, who lives in the same complex, also confirmed that the woman had returned to work.

Days later, her case worker at Social Services told Moreno that the recipient had reported her return to employment.

"That makes me feel good," Moreno said. "I like it when people turn out to be honest. It makes my day."

Vega prefers catching people who are ripping off the system in a grand way. Neither is sympathetic to people who cheat the system.

But both investigators hate the same part of the job: going into the poorest homes and finding children who have nothing to eat or who have been left alone.

In their free time, Vega and Moreno have returned to some of those homes, bringing food--sometimes a dozen doughnuts so a family will have breakfast, or even enough meat to supply dinner.

"I went to one home where the woman basically had a pile of bones in some water and was making soup," Moreno said. "There was no meat or anything else. It just breaks your heart to see it sometimes."

In turn, Vega has acted as a baby-sitter when she found young children left alone, stopping the day's investigations to stay with them until she could find a relative to come by.

"I finally found an aunt and explained that if she didn't get someone to come stay with the kids that I would call the police to take them into custody," Vega said. "But the children heard that and started crying and screaming. It was awful.

"There are people who just don't realize that a 9-year-old shouldn't be watching the 4-year-old," Vega said.

"So you give them a good lecture and explain what will happen if they do it again."

The following week, the two investigators are frustrated. They have been watching the home of a Westminster man whom they strongly believe is painting houses two or three days a week for money he is not declaring.

Already they have spoken to his neighbors and seen his truck loaded with painting supplies.

Finally, they decided to confront him, but only four children and a tenant, who rents a room in the apartment, were home.

The tenant said the man was working but was not sure because they work different hours.

Vega casually asked the children in Spanish, "What time does your father go to work?"

The children stared at her but said nothing.

Back in the car, Vega sighed. "Drats. It's probably going to take coming out here at 6:30 a.m. for a week to catch him going to work. I'll set it up for next week."